Commodity Trade Mantra

Posts Tagged ‘S&P 500’

Last 2 Times Equity Valuations Were This High, Result Was A Historic Crash

The current P/E expansion cycle is now one of the largest in history. Although equity valuations are typically highest during periods of low interest rates, the current 18x P/E stands at the upper end of the historical valuation range. During the last 40 years the only instance in which S&P 500 forward P/E exceeded 20x was the Tech Bubble (peak of 24x in December 1999).

Why the Stock Market Could Soar From Here

If the Powers That Be let markets melt down from here, where’s the bottom? Where’s the plan to bail out all the pension plans, banks, insurers, etc. that will be crippled by a full-blown stock market meltdown? It would be a lot cheaper and less painful to prop up stocks at these levels (a 10% decline) rather than let them fall off a cliff to a 40% decline.

The Fed Is Spooking the Markets, and Not China

The Fed has always known that the fragile economy created through stimulus might prove unable to survive even the most marginal of rate increases. The markets have now panicked that the rate hikes are about to occur in the face of a weakening economy. How much further will markets have to fall before the Fed comes to the rescue by calling off any threatened rate increase?

Why it Feels Like Something Isn’t Quite Right with the Stock Market

US stocks are still in a bull market. Large parts of the stock market are down significantly since June. Last Friday, Bloomberg reported that “roughly half the biggest stocks are mired in corrections, down 10 percent or more from their one-year high.” The S&P 500 is now up 210% from its 2009 low, and is up 2.1% this year. How can the stock market be up when so many stocks are down?

If Anyone Doubts That U.S. Is In A Stock Market Bubble, Show Them This

It would be one thing if stocks were soaring because the U.S. economy as a whole was doing extremely well. But we all know that isn’t true. Instead, what we have been experiencing is a clearly artificial stock market behavior that has nothing to do with economic reality. The warning signs are there – if you are willing to look at them.

Bizarre Love Triangle – Stocks, Gold And Oil

Using their historical relationship or long-term ranges: U.S. stocks look mildly cheap to oil and gold, but drops in those commodities would erase the difference just as easily as a further rally in stocks. Gold looks cheap relative to oil and should be $170 higher, or oil should trade closer to $71.

Gold, Dollar Index & S&P 500 Index - Long Cycles & Trend Changes

Given the troublesome global economic conditions & potential expansion of war, there is considerable risk that S&P 500 could fall substantially & a strong probability that gold will rally. A growing global movement away from the dollar use in global trade bodes poorly for long-term dollar strength but well for higher gold prices.

It Can't Be A Bubble! Does One Actually Exist Or Not?

Ultimately the question is whether brisk money supply growth will be maintained and whether the economy’s real pool of funding is still large enough to allow for additional diversions of scarce resources into bubble activities. Most of the time, it’s the eventual slowdown of money supply growth that brings a bubble to its knees.

5 Reasons Why The Market Won't Crash Or Will

Can this bull market last, given the current economic & fundamental variables? While we can eventually recover from a market crash, we can not regain the time lost to save & grow our investments to fund our retirement. Its critical to understand what the ramifications to your long term investment & financial planning goals will be if you are wrong.

Financial Markets - How Effective Have The Fed's QE Programs Been?

The rise & gains in the financial markets have come at a time when corporate profits are slowing; economic growth remains weak and geopolitical tensions have been on the rise. This is solely due to the Federal Reserve’s ongoing liquidity injections into the financial markets. How this all ends is really anyone’s guess.

Janet Yellen Is Wrong About Inflation

If consumer prices are rising faster than the authorities say, it means two important things: First, real GDP is not growing. Real GDP growth is adjusted for inflation. More inflation, less real growth. Second, the real cost of borrowing is much lower than we think. If inflation is higher, the real interest rate is lower.

Stocks And Precious Metals In Extreme Territory

The S&P 500 is relentlessly climbing to all time highs, driven by monetary bazookas of central bankers around the world. On the other hand, the precious metals have only been recovering from a disastrous year (2013) and are in search of a solid bottom. So now what do we look forward to?

Is It Time For Silver To Rise And S&P 500 To Dive?

Silver has had 3 bad years while the S&P has had five good years. It is time for both markets to reverse. Either the silver price should go up or the S&P should come down, or more likely, both will occur. With silver prices near 4 year lows, the silver to S&P ratio too is at a 5 year low. SO?

This Chart Shows How Bad The Economy Really Is: “Flashing Red Warning”

Forget about all the minute-by-minute noise for a moment & take a look at this chart. Last year analysts called it a fairly robust growth & cited these numbers as evidence of economic recovery. Wonder what they’d call it now, considering it shows a massive collapse in earnings per share growth across the board.

The Stealth Rally: Gold Under The Radar

So far, 2014 has been a paradoxical year for gold. In spite of this overwhelming negative sentiment, gold is experiencing a stealth rally as one of the best performing assets of the year. Let’s look at some important metrics of the most under-valued sector in this market.

How Commodity Super Cycle Will Decimate Mighty Bull Market

Rising commodity prices are relevant to the Fed only in the context that they confirm biases introduced through the lens of controlling monetary policy. In reality, these cause hypersensitive dislocations in the natural rhythm; hence, volatility. There are many factors at play outside of the human ego.

Common Trading Myths Revealed: Market Masters

For years now the masses continue to follow the crowd and just assume old trading axioms are gospel. Times change and as traders it is our job to adapt. Adapt first to stay ahead of the game. “Adapt or die” is one of my favorite trading rules. With that, here are six popular trading myths exposed.

Asset Purchases By The US Fed And The S&P 500

Periods where the Fed was buying bonds have seen stocks rally, whereas periods where the Fed was not actively purchasing bonds saw two of the largest pullbacks for the S&P 500 during this bull market – proving a historical correlation between increases in the Fed’s balance sheet & the S&P 500.

Goldman Explains What Must Happen For The "5 Year Bull Market" To Continue

S&P 500 celebrated the 5 year anniversary of the current bull market by slipping almost 2% this week. We identify key drivers of the 178% or 1200 point market rally since the bottom at 677 on March 9, 2009 & also consider how the 3 drivers might change in the future. Our 2014 target remains 1900.

10 Warnings Signs Of Stock Market Exuberance

Despite the repeated warning signs, the next stock market correction will leave investors devastated looking to point blame at everyone other than themselves. The question will simply be “why no one saw it coming?” When it occurs, we simply refuse to accept responsibility for the consequences.

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